Beyong the Meat Research Note

The Current Customer Base of Beyong The Meat

At one of the nation’s largest conventional grocers, Kroger, 93% of Beyond Burger buyers over the 26-week period ended June 30, 2018 also purchased animal protein during the same period, which evidences Beyond Meat’s appeal to meat-loving consumers.

This illustrates that the beyond burger buyer base are largely overlap with meat eating consumers. Also, a small part (7%) of beyond burger buyers are not traditional meat eators.


In the context of American and Canadian English, a patty is a flattened, usually round, serving of ground meat or meat alternatives.

Beaf Crumbles

beaf meat in small pieces, often made with flour, cheese and water.

The Gross Margin Advantage (Problematic)

The gross margin f beyond meat for the three months ended 2019 is 25%, above 2 times higher than tyson foods, the traditional meat maker.

However, the Sales G&A expenses of typson foods is less than half of its gross profit and typson foods has no R&D expenses. For beyond meat, this ratio is 2 to 1. Beyond Meat needs to increase sales revenue by 300% to make the same G&A/gross profit ratio. Given the 3 months ended Mar, 2019 performance, beyond meat should be able to meet this ratio level in 2 to 3 years, if Sales G&A expenses does not increase.

The Branding Problem

The company's flagship product, Beyond burger is branded as a retail product, which may introduce conflict of interest with beyond burger's distributors and retailers as it is directly competing with their existing private labelled burger products.

The Professional Employment Organization

According to the prospectus, currently each of Beyond Meat's employees is also an employee of record of the PEO.

BYND's Shipping and Handling Cost

The shipping and handling cost is included in the G&A expenses, which make the cost of goods sold seriously underestimated. As a result, the gross margin of BYND is inflated.

Based on the component of increased G&A expenses in year edned 2018, shipping and handling cost accounts for 26.6% of the G&A expenses (omit related headcount expenses). The gross margin of BYND would declined to around 10% if applying shipping and handling cost in this percentage of total G&A expenses of year ended 2018 and include them in the cost of goods sold. Also, the actual gross margin ratio would very likely to be lower given the related headcount expenses was omited due to lack of data.

In a gross margin ratio of 10%, BYND has no advantage over traditional meat producers.

Primary Component of Animal-based Meat

amino-acid, lipids, trace mineral and water

Market Competitiors

  1. Hormel, PPC, Tyson, WH Group

UAE ( no antibiotic ever)

R&D Expenses

The R&D expenses of Tyson food is $118 Million in the year of 2018, compared to $9.58 Million for Beyond Meat.